Apple passes Microsoft in profit, Verizon iPhone slows Android growth

This year is turning out to be a big one for Apple. They recently passed Microsoft in net income earnings at $5.99 billion compared to $5.23 billion from Microsoft -- mainly due to iOS devices like the iPad 2 and iPhone 4 driving sales and raising profit margins. The iPhone, iPad and iPod touch currently represent roughly 65% of overall sales for Apple, with the Verizon iPhone helping push demand even further as Android growth seems to be at a plateau.

Apple and Verizon had a very successful launch of the iPhone 4, which allowed the iPhone to expand its market share that was previously held back by its prolonged carrier exclusivity with AT&T [...] some of that growth came at the expense of Android operating system

Apple has now edged out HTC, Motorola and RIM as the third-largest smartphone maker in the US with a 14% share of sales, and they don't appear to be slowing down anytime soon. They just released the white iPhone 4 with reports of lines forming at Apple Stores -- all for a device that's already been on the market for 10 months, just in a different color. And with WWDC 2011 just around the corner for Apple to reveal iOS 5 to the masses, it seems they have nowhere to go but up from here.

But can the iPhone and iPad help sustain Apple's growth given how determined the competition is at beating them in the smartphone and tablet markets? Sound off in the comments below!

Andrew Wray is a Salt Lake City, Utah based writer who focuses on news, how-tos, and jailbreak. Andrew also enjoys running, spending time with his daughter, and jamming out on his guitar. He works in a management position for Unisys Technical Services, a subsidiary of Unisys Corporation.

I have apple and windows products; and an android phone. I go where I wish thank you. The big loser here is Microsoft. Frankly they blew it. Of course tablets will be replaced eventually but we will see them become the prevalent computer form factor. The OS war, if it is indeed a war, will have plenty of room for multiple players as time passes. I bought a Xoom, kept it for 1 week, returned it and ordered an iPad2 by the way. For the duration apple has the tablet market.

IDC released worldwide (revenue) figures : Apple is at 5%, up from 2.8% a year earlier. Great but as Nokia is down 5% and LG also a few percent there is no such thing as Android growth slowing, quite the opposite actually, they are gonna hurt Nokia much harder with even cheaper handsets. Only an Iphone Classic/Nano can turn the tide for Apple, else Android will rule by a big big margin, no matter how much Apple can sell in the US.

It's becoming very clear that Apple truly doesn't want to compete in the "low-end smartphone" market (and they doing pretty damn well too - see Q2 financials). However, Apple may be finally feeling a little pressure to enter the "value phone" market (which Android-OS devices seems to be doing very well with).

Of course the Verizon iPhone was gonna slow down Android growth, all the Verizon customers who went with Android really wanted an iPhone. Android was a nice substitute but it's no iPhone. Android only "dominates" the smartphone market because it's available on all carriers and all the phone manufacturers can get it and make an Android phone. If the iPhone was as available as Android, it would decimate Android just like how it's destroyed Blackberry and Nokia.

I disagree. Not everyone (maybe not even the majority) who owns a android os device would have been willing to pay "iPhone prices" even if it was available on more carriers. Android os devices allows manufactures to compete with the Apple iPhone while being priced significantly cheaper in many cases.

Incorrect. iPhone IS as available as Android. Stick your head out of US tiny pond and look around. As soon an SJ felt the pressure he released iPhone to all possible networks, whoever wanted could have it. Result - minimal to nil. Android rules the Earth.

There are also a lot of people who actually do choose an Android phone. I like Apple as much as anyone, but the variety and features of Android phones will never be matched by the iPhone. For example, why is the Thunderbolt 4G, priced the same as the iPhone and still selling well? It's a great phone and has several features, namely LTE, that will not be seen until the iPhone 6. Also, Android just became America's most desired smartphone OS, even since the VZW iPhone released (http://www.androidcentral.com/nielsen-android-americas-most-wanted-platform). I don't think the folks at Google are too worried about Android's sales slowing.

There is a difference between most affordable and most desired. LTE is a joke on the Thunderbolt because you can barely make it to the first commercial on hulu before it's dead. Wait! Is there a hulu app in the Android Market? (crickets) I don't mean one that somebody made in their room either. Either way it's ridiculous to compare The entire Android OS to the IPhone. Android phones are made and sold for $5 by every manufacterer with a tool bench in his garage! So let's stick to this Thunderbolt comparison that you've started and let's talk numbers!! Lol!

From an investor's perspective Android Market share means absolutely nothing. I cannot invest in Android, nor do I measure my GOOG shares in terms of Android, so I must look at Motorola and the rest individually. How does Android market share help me in such analysis?
Someone could argue that the market share could tip the developer towards Android. I find two large flaws in that argument.
First iOS surge has caused a corresponding surge in OS/X adoption in Asia. So at the street level, iOS is doing fine and will push developers to respond. They cannot possibly ignore 100+ million iOS users.
Second, Apple has paid out $2 BIllion to developers. How much has Google paid? Motorola? HTC? Sony? Samsung?
Developers cannot ignore a huge market; especially one that pays so well!
In conclusion, it is clear that Android dominating the market means very little. Just like Nokia dominating the market means little to nothing and RIM dominating the market also means squat. In the end, it is about growth and profit margin.
Who is growing in leaps and bounds over the past 20 quarters? Who is seeing a healthy profit margin all through those quarters?
Whose product is sold out yet again, on the first day of release, in Asia? Whose product is seeing lines in Japan, even after a recent traumatic experience?
Does Android being King really matter?

HTC also tripled their smartphone sales year over year and came up to 12 million units, less than the 18 million Iphones but a) HTC is just one Android vendor and b) not all their models are cheap.
I do however fully agree that this is a revenue vs. margin discussion and that Android poses no threat whatsoever to iOS in the short run but can't help comparing with Windows vs. Mac 25 years ago. Apple was lucky to have Steve to get back on track in 2001 but who knows what will happen in 10 years from now...
Having a large installed base is never a bad move, perhaps Apple should license iOS as MS is doing with WP7 on Nokia.

Wrong logic. You forget effect of scale. Because Android is so huge, fewer % of people need to take an app than on any other, smaller platform, and its still a win.
Why do you think automotive these days tends to concentrate on China/India markets rather than US?
As for the "sold out" propaganda, it only proves how poor Apple planning is. Investors are very disappointed.

Scale means absolutely nothing if developers give their apps away. By comparison most Android developers have to give them away. As far as carriers around the world? They too are giving Android handsets away for free. The margins for Mot, HTC, LG, RIM etc. are zero to nil on a per unit basis no matter how many units they sell. In this dog eat dog world cash is king and Apple has more that all of your Android cell companies combined. It's all about who will outlast their competition. If HTC is just one Android vendor Apple is the sole IOS vendor but count the models of smartphones (along with costs involved) that HTC produced in a year in order to achieve the 12 million units. Then look at Apple and their one model per year sales.
As far as the sold out "propaganda" people are not blind. The lines and excitement are all over the media but all you have to do is visit a local Apple store at your mall any day of the week. Sure.. investors are so disappointed that they are driving the stock price near its all time high.. You are really making a lot of sense with your "Right logic"!!!

Another stupid com met without any facts. Investors are disappointed? Apple just had the best quarter in their history...........
In regards to poor planning, it is tough to forecast consumer demand on an item such as iPad 2. Second generation, nice upgrade, a "want to have" rather than a "gotta have.". Yet Apple sold more ipad2' s in the time it takes to drink a cup of coffee on launch day to what Motorola and RIM did in a month.......combined.
Best thing for you is to troll elsewhere, or maybe take your crayons and waste your time on a nice picture.....jerk wad!

People who buy Android devices, also buy no name brand food, buy their clothes at garage sales, use Windows PCs, and have so much junk on their passenger seats that nobody else can even get into their cars.
No class or pride.

That's a really big generalization to make. That's like saying that all people who buy iPhones are liberal and rich. I personally have a Nexus S because I prefer the features of it compared to an iPhone. That's nothing against Apple, just my choice. But saying people who buy Android have no class or pride is simply asinine.

I used to think you were just an ignorant fool but now you've confirmed my suspicions. You're simply an idiotic elitist wannabe who is nothing but a drain on society. Now I see the argument for abortion. Too bad your mommy didn't know how to use a coat hanger properly.

Most people on both sides of this ios vs android debate are just getting WAAAAAAYYYYY to into it. THEY ARE PHONES! you have one guy on here saying that basically only dirty people buy android and you got guys on android sites saying people who buy ios devices are worthless sheep who cant think for themselves. i personally prefer android because it gives me the things i need. i like to customze things to my liking without having to jailbreak anything and i love the androids ui. some people prefer apples polished look and mac integration. its a matter of preferance your not an evil person for liking one over the other.it is truly petty pathetic and childish

Everybody keeps talking about cheap phones and profit margins. Yeah they are cheap to a degree but the carriers pay retail prices for the phones and subsidize them. So profit margins can still be good for companies that manufacture android phones. I agree Apple makes a premium product and can charge more but these android manufacturers aren't giving it away.

I'd love to know the numbers of Droid owners, who only went Android, because they thought that the iPhone would never come to Verizon.
That, I suspect, will play out in the next 18 months or so.
Also, whilst Android is a worthy competitor, I'm sure that the fact that it's on all carriers, and in a lot of low and mid-range(cheaper) devices, is a major reason why the numbers are as they currently are.

The numbers, or at least the stats are right there in front of you if you bother to look. look at the number of users who chose Thunderbolt over iPhone. Verzon sold over 250,000 Thunderbolts in March. That's one Android handset out of many on Verizon, based largely on last years specs, going up against years of pent up demand or the iPhone. A quarter of a million Verizon customers still chose an Android phone(we don't have have the data on how many chose other Android phones) right in the middle of the Verizon iPhone frenzy. What till the true next gen Android phones start dropping on Verizon over the next few months.
More important than that, Android still clobbered iOS in smartphone sales for March. Dropping from 53% to 50% of overall sales in the month the iPhone launched on the largest US carrier is not a plateau and Rene should be embarresed to even post some drivel like that. Look at how much of the overall all market AT&T and Verizon hold. To have the iPhone available on both carriers and still have the Android take 50% simply shows that no matter what Steve does, Android is still an unstoppable freight train at this point. The Nielsen data posted up by someone else a earlier showing that more people want an Android phone rather than an iPhone as their next phones is pretty amazing, so now Android is not only beating iOS in smartphone sales, it is the most desired smartphone OS. All this completely kills the argument about settling for an Android phone. Honestly that argument was always pretty lame considering that outside of the US where the iPhone was not carrier limited, Android still dominated by a large and ever growing percentage. The Android dominates because it is put on cheap handsets line is pretty dumb also considering the massive sales of Highend Android phones at the same or higher price point than the iPhone. Companies don't continue to produce what doesn't sale, and there are new Android high end phones dropping every other month. That pretty much says it all.
It's amazing that Rene ignores posting this types of sales and growth studies month after month, including the Nielsen data that was just released a week ago, because they show Android smartphones totally besting iOS, but as soon as something shows up that shows iOS in a better light, though still getting totally dominated, it goes right up.

A lot of wind from EricSchmidt. Sounds a lot like Donald Trump......lots od words, but no substance.
Hey Eric. you have a new name. TRUMP.
Everyone, when you find Trump trolling, give him what he deserves.

@Eric. There you go again.........Same weak Android arguments with distorted facts. Do you do this for a living to try and get a reaction out of everyone? Wouldn't your drivel be more accepted say, on a Roid blog? That way you can distort facts all you want with no support and look like a genius.......Let's see, where do I start?
First off, I'm pissed that the two minutes it took to read your brilliant take, I cannot have back.....time wasted.
Verizon sold more Thunderbolts than iPhone in March......do you think timing of the launch had anything to do with it? And don't talk about Thunderbolt being on last years specs......what the hell is iphone 4? Wasn't it in February that iPhone 4 was the most successful phone launch in Verizon's history? Look it up, Einstein. Next.
Android can be the market leader in OS, but your numbers or facts cannot distort the following.......iPhone 4 is the best selling PHONE in the world. Does Apple want to compete with Android handset makers with a Buy 1 for a penny, Get 1 for a penny? Probably not, based on the performance of the company stock and the company coming off it's best quarter EVER. Don't you think a consumer is intrigued by spending nothing for the handset compared to $199 or $299? If not, then you are dumber than I thought you were. And if I'm wrong, which "high end Android phone" has sold more units than iPhone 4? What "massive sales are you referring to?
Well, I've wasted enough of my day already, and I assume you will post a reply rather than just go away. Could you do me a huge favor though? Please, please save yours and everyone else's time and fade into the sunset, or have buddy time with your brethren at Android Central. The world will be a better place!

I don't truly understand what people are even arguing when it comes to iOS and the Android platform. It would seem to me that Apple and Google are doing different things. If anyone remembers the original iPhone presentation by Steve Jobs, he clearly laid out what the goals of the iPhone were as a product (music device, messaging device, and computer like email and browsing). To that end I would say that Apple has succeeded. While Apple I am sure would like to capture as much of the market as possible, their own strategy is by definition going to keep them from capturing the the majority of the market. They offer 2 phones. Google's OS is on countless phones.
Android on the other hand has taken a different approach (not worse or wrong, just different). In a way it appears they are trying to do what Microsoft did, which is offer their OS on as many devices as possible at varying price ranges. This has lead to the fragmentation "issue" if you choose to call it an issue. At the end of the day, Android is going to be more prevalent than iOS just due to the shear amount of devices running android and the fact that many of their phones are at a lower price range.
Is this hurting Apple? Apparently not, based on their recent financial reports, and one has to wonder, does Apple even consider themselves to be in a market war? Probably not. They, as always, are concerned with providing the best experience with their products. They cannot do this with 20+ different types of phones on the market all with varying features. Do they want to put out as much of their product as possible, absolutely, but not at the expense of degrading their product or possibly deviating from their goals–whatever they may be.
In short. People are going to buy what they are going to buy. If LTE is important or the current latest and greatest is important to a consumer, they are probably going to pass on the iPhone at this point in time and choose an android phone with these desired features. Apple is concerned with providing an apple-esque consumer experience. If this gains them market share, great, but ultimately, if you look at how they operate as a company, I don't think it's their primary concern.

I had an iPhone 3G and 4 for the longest time. They are great phones. Perfect and very user friendly. A little too friendly for my taste though. I recently switched to the Inspire on ATT network and I couldn't be happier. My first android phone as I was growing tired of having to jailbreak my iPhone all the time. They are two totally different styles of OS.

Seriously, what in the blue hell are android users doing here?
From having an iOS device(myself), I learn a few thing, well more like acquired a necessity as an Apple device owner.
Simply have class and be well spoken. I have nor will I ever have the urge to visit an android site. For what reason? Just to tell them android is a piece of you-know-what! Lol.
We as Apple user now that already. C'mon it's commen sense and logic. Androidnites go troll somewhere else you ignorant dispicable people.